The publication of the August U.S. jobs report came as a cold shower for investors in risk assets. Contrary to analysts' expectations, who had forecast the creation of only 56 thousand new jobs, the actual figure turned out to be nearly three times higher — 162 thousand. This powerful signal about the health of the economy instantly dashed hopes for an imminent easing of the Federal Reserve's monetary policy, triggering a sharp decline in both bitcoin and gold.
The labor market shows strength, breaking the rate-cut scenario
The data I analyzed indicates that the U.S. economy continues to remain in good shape. The average gain over the last three months stood at 71 thousand jobs, significantly higher than previous estimates. A key point was also the substantial upward revision of data for previous months: instead of a decline of 23 thousand in July, we now see an increase of 21 thousand, while the June figure was revised from 20 to 31 thousand. This finally dispels the narrative of an impending recession that had been actively fueled by the market earlier.
The unemployment rate remained stable at 4.1%, and average hourly earnings rose by 0.3% on a monthly basis, reaching $37.75. The annual wage growth rate of 3.1% is an argument for the "hawks" at the Fed, who are concerned about inflationary pressure. Now that the probability of a rate hike in September has again become real, the market is in a state of heightened volatility.
Instant reaction: bitcoin lost $80,000 on a single candle
The market's reaction was not long in coming. Bitcoin, which was trading around $81,340 before the report's release, crashed to $79,661 within minutes, losing 1.80% on a single five-minute candle. Gold, often viewed as a safe-haven asset, also failed to hold its ground: its price fell from $4,473 to $4,376 per ounce, corresponding to a decline of 1.75%. This clearly demonstrates that in the current situation, both assets are moving in sync, reacting to changes in expectations regarding the Fed's rate.
The wave of liquidations in the crypto market wiped out the positions of overly optimistic traders. In just one hour after the data release, the volume of liquidated long positions amounted to $202 million, and the total daily liquidation sum reached an impressive $768.54 million. This indicates a high degree of leverage in the market and its sensitivity to macroeconomic data.
Now all attention shifts to the inflation data, which will be published on September 11. It is this data that will become the decisive factor for the Fed. If inflation comes in below expectations, the market will have a chance to reassess Friday's decline, and we may see a return to levels above $80,000. However, if the current trend in the data persists, pressure on bitcoin and gold will remain until the Fed meeting.
My comment: This episode once again confirms that bitcoin and gold are currently in the same boat, steered by U.S. monetary policy. Investors should not ignore this factor in the medium term.